CAPITAL GAINS TAX

Private Residence Relief Final Period Exemption

Where a person disposes of a property that he is not currently living in but which has been his main residence at any time, he is entitled to relief for the final period of ownership. Where contracts for the sale of the property are exchanged on or after 6 April 2014, the period of ownership for which this relief is available will be reduced in most cases from 36 months to 18 months.

The 36-month period will remain in force however where the property disposal is made by an individual who is, or whose spouse or civil partner is, a disabled person or a long-term resident in a care home, provided that neither holds an interest in any other dwelling-house.

Business Asset Roll-over Relief

Payment entitlements under the Single Payment Scheme – the principal agricultural subsidy scheme in the European Union – have been included in the classes of assets eligible for capital gainst tax roll-over relief since 22 March 2005. These payment entitlements will cease in 2014 with new payment entitlements being allocated to farmers under the Basic Payment Scheme.

Legislation will be introduced in Finance Act 2014 with effect in relation to acquisitions and disposals of Basic Payment Scheme payment entitlements on and after 20 December 2013 to include payment entitlements under the Basic Payment Scheme within the classes of assets eligible for capital gains tax roll-over relief.

Roll-over Relief: Reinvestment in Intangible Fixed Assets

With effect from 19 March 2014, companies are prevented from claiming chargeable gains roll-over relief on the disposal of tangible assets where the proceeds are reinvested in an intangible fixed asset. The measure also adjusts the tax cost of the replacement intangible fixed asset for claims made on or after 1 April 2009 and before 19 March 2014, preventing double tax relief being given on any roll-over relief claims already made. This measure corrects an error in the drafting of the legislation.

Split Year Treatment

Legislation will be included in Finance Act 2014 to correct a defect in the split year residence rules to ensure that capital gains made by a user of the remittance basis in the overseas part of a split year are not charged to capital gains tax.

Non-Residents Disposing of UK Residential Property

The scope of capital gains tax is to be extended to include disposals by non-UK residents of residential property in the UK. The new charge will apply with effect from April 2015.